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Mulcaire Asked News Corp. for $1.2 Million to Identify Hackers

The British private eye jailed in 2007 for hacking into celebrities’ voice mails for News Corp.’s News of the World tabloid demanded 750,000 pounds ($1.2 million) from the company for information about his activities.

Glenn Mulcaire requested the money in June 2010 in exchange for providing News Corp.’s U.K. publishing unit with the names of reporters who instructed him to hack phones, the private investigator’s lawyer said at a trial today in London. The company didn’t pay the sum.

Mulcaire is a defendant in about 60 civil lawsuits filed by victims and a parallel Court of Appeal case. He sued News Corp.’s U.K. unit over claims it shouldn’t have stopped paying his legal fees in July, after British lawmakers accused the company of seeking to buy Mulcaire’s silence.

“Despite the rhetoric of parliamentarians, there is nothing exotic, unusual or improper in the arrangements” to pay his legal fees, Mulcaire’s lawyer, Benjamin Williams, said at the trial today. When both an employer and an employee have acted illegally, “it is not remarkable to find the employer paying its employee’s legal costs.”

Mulcaire, who was jailed in 2007 after pleading guilty to phone-hacking offenses, was arrested again last week as part of a new police probe of the scandal, which triggered the closure of the tabloid in July. Mulcaire’s lawyer also said today that the private detective took instructions from Ian Edmondson, a former news editor who was one of the first people arrested after police started the new investigation in January.

Royal Family Hacking

Before today, Mulcaire was only known to have hacked phones on behalf the tabloid’s former royal reporter Clive Goodman, who was also jailed in 2007. The men admitted intercepting phone messages meant for members of Prince Charles’ staff and several other public figures.

Edmondson’s lawyer, Eddie Parladorio, didn’t immediately return a call seeking comment.

Another Mulcaire lawyer, Sarah Webb, said at the trial that Mulcaire demanded the money because he felt he was being mistreated by the company compared to other people associated with the phone-hacking scandal.

News International’s lawyer, Alain Choo-Choy, said the company agreed to pay Mulcaire’s legal costs and potential damage awards against him as long as he assisted them, and that the agreement could be withdrawn at any time.

The company needed the information “to understand the full extent of Mr. Mulcaire’s voice-mail interception activities and consequently” the publisher’s “potential exposure in the voice-mail interception litigation,” Choo-Choy said in court papers.

Dowler Voice Mails

The trial began a day after a judge-led inquiry into the ethics of the British media heard police retract one of the most damaging claims against Mulcaire -- that he deleted the voice mails of murdered school girl Milly Dowler while she was still missing in 2002, giving her parents false hope she was alive.

While the Dowler claim isn’t related to a lawsuit, a Guardian newspaper article about the hacking in July resulted in News Corp. shutting the 168-year-old tabloid to help contain public outrage.

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